Back to the FSU Exit Thing

FSU currently runs about a $2M budget deficit. Over the past couple of years, according to the USA Today, FSU’s spending has outstripped its revenues by roughly $8M. This from a school that can’t even win the middling ACC. Burt Reynolds or Lee Corso must be their staff accountant.

But let’s entertain the financial issues that FSU will face should it leave the ACC for a bigger payday in the Big 12. Mind you, no one knows what that payout would be. Big 12 teams reportedly receive $20M a year from the Big 12’s TV contract, although UT receives additional revenue from the Longhorn TV Network. The new ACC deal will average $17M equally distributed among its members.

Doak Campbell Stadium holds 82,300 spectators. According to FSU, they sold out two games last year among their 7 home dates (OU: 84,392 and Miami: 82,322) and had an average attendance of 77,842. The OU game set the record for the largest crowd in the stadium’s history.

While TV contracts certainly bring in quite a bit of revenue, stadium gate receipts bring in a considerable amount, too. Let’s take a conservative estimate of FSU’s average ticket price: $20. At this price point, FSU should expect a per game gate receipt of $1.65Mand a yearly gate receipt across 7 home games of $11.52M. Using this price point for last year, FSU’s home gate receipt would be $10.9M. This represents $620K of lost opportunity revenue. Their 2010 numbers were worse: 71,270 average attendance at $20 per ticket resulting in a yearly gate receipt of $9.98M and a lost opportunity revenue of$1.54M. Hmmmm…FSU is running a $2M deficit and $620K plus $1.54M gets you just over $2M. SCIENCE!!!

The question FSU needs to ask itself is what attendance would look like facing a Big 12 slate of games. They would get OU or Texas every year at home, and they would still presumably have Miami and Florida (2010 figures: 82,324) at home every other year; meaning they will sell out 2 games a year like they currently do. So will an Iowa State game outdraw a game against Maryland (72,697)? Or will K State outdraw UVA (77,178)? Or Kansas outdraw NCSt (80,849)? Would Baylor outdraw BC or Wake (2010 figures: 75,301and 61,647, respectively)? Would TTU outdraw UNC or Clemson (2010 figures:70,157 and 72,228)?

Maybe you’re saying this all depends if FSU has a winning record. FSU was 10-4 in 2010 and 9-4 in 2011. But winning and excitement do matter. What will FSU draw after a couple of 3-4th place finishes in the Big 12? Given how much more OU and UT bring in (+$30M to $70M~) and spend (+$7M to $45M~) than FSU, which can’t even balance a budget in the lowly ACC and would have to pay $20-25M exit fees, how will FSU be able to ramp up spending to compete? Remember, they can't even win the ACC on a regular basis.

Financially, FSU can’t afford to jump to the Big 12. Like me at the Thanksgiving dinner table, FSU fans have big eyes.